We examine how the ownership of intellectual property rights influences patenting of university-discovered inventions. In 2002, Germany transferred patent rights from faculty members to their universities. To identify the effect on the volume of patenting, we exploit the researcher-level exogeneity of the 2002 policy change using a novel researcher-level panel database that includes a control group not affected by the law change. For professors who had existing industry connections, the policy decreased patenting, but for those without prior industry connections, it increased patenting. Overall, fewer university inventions were patented following the shift from inventor to institutional ownership.

In other words, the authors have used a quasi-experimental event - a change in the law - to see what happens under different legal regimes. They have good data and use it to their benefit: actual patenting by individual researchers, a decent control group that did not experience a change in the law, and information about career and publications to correct for general productivity. I'll discuss the results a bit more after the jump.
Although the article likens the two, the German experience is slightly different than Bayh-Dole in the US. In Germany, individual professors were entitled to retain their own patented inventions until 2002, when the default ownership moved to the university. In the US, the prior default was not with the inventor, but with the government.

To recap the findings here, the authors found that among the professors who didnot have prior industry affiliations, patenting increased. But among professors who did have such affiliations, patenting went down.

These findings run counter to traditional anecdotal narratives I usually hear about patenting:

1. One narrative is that universities are inefficient at patenting, because they have to rely on knocking on faculty doors to get disclosures. This may well be true, but the results of this study imply that as between universities and unconnected faculty, universities are better at getting patents issued.

2. A second narrative is that professors want to share knowledge, and in general hate patenting because it might lock up inventions from future research and use. This, too, may be true and is likely more true in some technologies than others. But here patenting went down when professors with ties to industry lost the right to own their inventions and exploit them directly. And it turns out that was most of the professors in the dataset, so that patenting on the whole went down. This may be a German thing versus a US thing, but if it were true that professors are the guardians of knowledge and free-flow of their research, we might not have seen these effects. Of course, only a small subset of faculty patented in the first place.

In other words, this study seems to show that university patenting is far more complex (or as the authors call it, heterogeneous) than most theoretical or anecdotal narratives imply.